Ford CEO Farley challenges dealers to cut EV cost to customers by $2,000

[GDN]

My dealer said they made 600 bucks plus invectives on my MSRP deal. I have no reason to not believe them. They don’t gouge dealer orders but will mark up inventory cars.

This is how the story gets twisted. They didn't disclose those incentives I'm guessing. If you want to believe them and have a fun honest conversation with them, just ask them flat out what was the bottom dollar number they made for selling you your truck.

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[Rob G]

This is how the story gets twisted. They didn't disclose those incentives I'm guessing. If you want to believe them and have a fun honest conversation with them, just ask them flat out what was the bottom dollar number they made for selling you your truck.

Perhaps the salesman was unaware of incentives. In the end it doesn’t matter, I agreed to an MSRP deal and they honored it. If folks don’t believe the truck is worth MSRP then don’t buy one.

Farley’s comment is ridiculous. If he wants them sold for 2000 less then lower the MSRP by 2000.

 

[GDN]

Perhaps the salesman was unaware of incentives. In the end it doesn’t matter, I agreed to an MSRP deal and they honored it. If folks don’t believe the truck is worth MSRP then don’t buy one.

Agree - truly most of the sales people don't know much about the real numbers at all. I agree with MSRP, I think it is very fair on trucks like these. I'll also say I'm not sure if it is fair that Farley asks the dealer to try and cut $2K out of a truck like this although the dealers truly do almost nothing for that amount. It is just that laws protect them and say the trucks must pass through a dealer.

The conversation turned however to the fact that the dealers were only making a few bucks between the price of the invoice and the MSRP and that is truly known to be false. There is much more they are making.

 

[GarageMahal]

Perhaps the salesman was unaware of incentives. In the end it doesn’t matter, I agreed to an MSRP deal and they honored it. If folks don’t believe the truck is worth MSRP then don’t buy one.

Farley’s comment is ridiculous. If he wants them sold for 2000 less then lower the MSRP by 2000.

I think lowering the MSRP is his goal but want's the dealers to share the cost (or shoulder most of it) which frankly seems fair as they can essentially do away with sales staff that add very little value at this point.

 

[cvalue13]

I think we’re misunderstanding the reasonable interpretation of Farley’s point.

A dealer will make differing amounts on differing vehicles in differing deals. Compare only the example of a Pro purchased all cash, no trade in, and no dealer add-ons, to instead a Platinum with minimum down payment, Ford financing, tint, lo-jack, extended warranty, and a trade-in where the salesperson managed to bend buyer over. In the Pro deal, the dealer is making 10% of MSRP (assuming they hit all playbook metrics), in the Platinum deal the dealer could be making >3-4Xwhat they made in the sale of the Pro.

Accordingly, we’re thinking about it wrong to interpret Farley to be saying $2,000.00 exactly needs be shaved off each unit, as opposed to saying that on an all-in basis across all trims and deal types, dealers need on average to reign in their shenanigan bullsh*t if they’re going to sell EV’s competitively against the EV competition.

Take me for example. I bought my Lariat, and dealer made 10% MSRP. But I also accepted the 3rd party financing they sourced for me and for which they get essentially a broker fee. Then I traded in my 2018 platinum for $2K less than I bought it for 4 years ago, only for it to show up on their sales lot for $14,000K more than they gave me in trade (it sold within a week). Then I sat in the F&I office for 35-40 minutes swatting away bullsh*t add on sales tactics.***.

That old world dealer behavior, in the new world of the expectations of BEV buyers, is not going to survive.

*** speaking of F&I old world bullsh*t: I love how fast the sales pitch changes between when the salesperson is telling you to buy the BEV because the money you’ll save on maintenance, only to next sit in F&I and have that person tell you how badly you need extended warranty because “even though you don’t need oil changes, these things are full of electronics and when electronics break it is crazy expensive.”

ESIT TO ADD: just thinking back through my buying experience facing my dealer, it leaves such a sh*t taste in my mouth it absolutely warms me to the idea of a Tesla or any alternative purchase model. I’ll accept less vehicle for more money to not fell this sort of disdain for old-school car sales bullsh*t

 

[F-150 Prius]

My dealer said they made 600 bucks plus invectives on my MSRP deal. I have no reason to not believe them. They don’t gouge dealer orders but will mark up inventory cars.

"invectives" … how true.
fwiw, for anything over the average ($50K) the factory top lines about 30%, the dealer makes about 20% plus, 35%+ on options, parts and service, plug factory incentives and franchise terms. That's in normal business 3 years ago. Margins have increased dramatically in '20-'21 … dealers are enjoying the msrp+ market.
You can tell a car dealer is lying to a customer …

 

[Rob G]

"invectives" … how true.
fwiw, for anything over the average ($50K) the factory top lines about 30%, the dealer makes about 20% plus, 35%+ on options, parts and service, plug factory incentives and franchise terms. That's in normal business 3 years ago. Margins have increased dramatically in '20-'21 … dealers are enjoying the msrp+ market.
You can tell a car dealer is lying to a customer …

Honestly focused on the typo? Tapped this out on my iPhone. I should pay better attention.

Here’s the point, I reserved and then ordered a configuration online. I paid the price that Ford published on the web page. If Ford wanted me to pay less they should’ve asked me for less.

Regardless of what the dealer made, and perhaps the sales person has no idea what that is, I paid the price (MSRP) that I agreed to pay. No hassles, no issues, no add ons.

If others pay over MSRP that’s a decision they make, I wouldn’t, but others do. I can’t decide what right or wrong for them.

 

[ExCivilian]

when I read the article it didn’t sound like he’s saying the cost needs to drop by $2,000 in the way this thread seems to be discussing. He’s discussing the difference between the overall cost to sell a vehicle compared to Teslas costs to do same and has found a couple thousand dollars he thinks dealerships should be able to do to be more competitive—it’s not necessarily any the final price although one could infer that.

that’s why he used one of the examples of delivering the vehicle right to the customers door because that will cost dealers less money than holding those in inventory.

Once Ford can get closer price parity on delivery costs he’s booking develop other revenue streams like services, which is also something Tesla is doing.

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